SVoDs hit by churn

A consumer survey from analyst firm Juniper Research has found that increased churn rates are being faced by video streaming services such as Amazon Prime (-2.9 per cent) and HBO Now (-19.2 per cent) in key markets such as the UK and the US.

Contrastingly, Netflix outperformed its rivals; showing positive adoption rates in both the US and UK (6.3 per cent and 7.7 per cent), opposing the belief that services are discontinued after a trial month.

Juniper’s latest research, Digital TV & Video: Consumer Attitudes and Network & OTT Strategies 2018-2023, found that consumers are burdened with numerous SVoD (Subscription Video on Demand) subscriptions. For example, the survey highlighted that Chinese and US respondents acquire an average of 3 subscriptions each, in comparison to 2.5 in the UK.

“The use of multiple subscriptions suggests that no one provider offers enough to currently satisfy consumers,” noted research author Lauren Foye. “Juniper finds a growing danger in users reducing, or switching SVoD subscriptions, as monthly fees inevitably rise as a result of ever-increasing content spend; Netflix alone is set to spend $13 billion this year.”

The research also found that the curation of content is set to become a growing issue, with the need to engage consumers as critical, lest SVoD providers see unsatisfactory services cancelled. Juniper urges collaboration between OTTs and traditional platforms. For example, Sky hosting Netflix content via its Q platform; a slick and refined user experience.

The survey identified the importance of broadcast. 40 per cent of UK survey respondents stated that they streamed live sports, yet only 6 per cent of these individuals watch sports through online channels alone; consequently streamers continue to utilise broadcast sports.

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US OTT Churn Rate at 19%.

The churn rate for OTT video services is 19 percent of U.S. broadband households, according to Parks Associates, meaning that roughly one in five households has canceled a streaming service in the last 12 months.

The OTT Video Market Tracker service finds the overall churn rate for OTT services has been stable for the past year. At the end of 2015, 20 percent of U.S. broadband households had canceled at least one OTT video service in the past 12 months. Churn is found to be lowest among the top three most established services: Netflix, Amazon and Hulu.

Households with OTT video subscriptions increased their spending from an average of $3.71 per month in 2012 to $7.95 in 2016. Spending on physical media purchases and rentals declined from an average of $15 per month to $8 per month, while spending on digital transactional video declined from an average of $2.42 per month to $1.42 per month.

“The churn rate has held steady, with one-in-five broadband households canceling an OTT video service in the past year,” said Brett Sappington, the senior director of research at Parks Associates. “These are not free trials but instances where consumers are spending real money to try out new OTT services. One-third of households that currently subscribe to an OTT video service have canceled one or more services in the past year, which shows that there is quite a bit of experimentation occurring right now.”

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Neglect customer experience at your peril, research warns Pay-TV providers

Pay-TV operators can no longer simply rely on the strength of their content offering to maintain subscriber loyalty, but must raise their customer relationship management game to gain ground in an increasingly competitive marketplace.

This is the top-line find of a survey of more than 6,200 consumers in Australia, Brazil, Germany, Singapore, the United Kingdom and the United States from subscription, billing and CRM specialist Paywizard. The Facing the Perils of Failed Customer Experience survey carried the warning for operators that more than four-fifths of consumers would cancel a pay-TV subscription due to poor customer experience, such as if service and support were lacking and the company seemed out of touch with their needs. Indeed, the data showed that a quarter have actually done so in the past year.

By contrast, the survey also found that almost half (46%) of consumers have retained a digital pay-TV subscription they might otherwise have cancelled because of positive customer experience. The findings show, said Paywizard, that younger consumers place greater value on customer experience when it comes to sticking with a provider. Just under three-fifths of those under age 35 say this has been a factor in keeping a service over the past year.

Nearly three-quarters of consumers who have added a digital pay-TV subscription over the past year end up increasing their overall spend on television and entertainment. On the other hand, more than a quarter still reduced total TV spend by downgrading their general pay-TV package or cutting other subscriptions – making clear that there are losers among operators that fail to build strong bonds with their customers.

To be on the winning end of consumers’ decisions regarding their TV and entertainment budgets, Paywizard advises pay-TV operators to overcome a ‘dip-in, dip-out’ attitude on the part of subscribers. The survey revealed that most consumers intend to drop some pay-TV services – for instance, cutting part of a cable or satellite package – if they take another, such as an on-demand video subscription. Almost two-thirds of those who have not taken a new subscription in the past would cut back on other digital subscriptions or downgrade a general package to bring down the cost if they were to sign up to a new or additional pay-over-the-top (OTT) service.

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http://www.rapidtvnews.com/2017012645926/neglect-customer-experience-at-your-peril-research-warns-pay-tv-providers.html#axzz4WrqMndoc